Criticism of the Department of Labor’s proposed fiduciary rule has been hot and heavy— first during the comment period, and now in testimony from the financial industry— and the Investment Company Institute was just the latest to pile on.

The DOL-proposed standards are taking heavy flak from financial companies and trade groups—criticisms that began even before testimony started—although consumer advocates are weighing in in favor of provisions that they say are necessary to protect consumers and improve people’s chances of saving enough money for retirement.

In testimony, ICI came out strongly against the validity of the DOL’s Regulatory Impact Analysis and also expressed concern that adoption of the rules would result in “a loss of investment advice for many IRA investors, especially those with low- to moderate-incomes.”

In his statement, Sean Collins, senior director for industry and financial analysis at ICI, said that the impact analysis failed to consider the question of whether an investor’s performance is different when the advisor is a fiduciary compared to when an advisor is not a fiduciary.

Collins also said that the data used by the DOL to determine that investors would derive great benefits from having fiduciaries as advisors was flawed, did not represent current market conditions, failed to consider “readily available data” that he said contradicted DOL’s “claims about broker-sold funds” and did not consider what would happen to investors who had either to seek fee-only advice or go without.

While some investors may turn to fee-only advice, he said, “[t]hese investors, especially low- to moderate-income investors with lower balances, may end up paying much higher overall fees.”

And the latter case would occur for investors who did not opt to pay for advice on investing their retirement funds. In his statement, Collins said, “The Analysis assumes that the rule proposal, if adopted, will drive down brokers’ commissions significantly, but that brokers will continue to provide the same services to retirement investors. That is unrealistic.”

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